NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. NO SALE OR DISPOSITION THEREOF MAY BE EFFECTED WITHOUT
(I) EFFECTIVE REGISTRATION STATEMENTS RELATED THERETO, (ii) AN OPINION OF
COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH
REGISTRATIONS ARE NOT REQUIRED, (iii) RECEIPT OF NO-ACTION LET'TERS FROM THE
APPROPRIATE GOVERNMENTAL AUTHORITIES, OR (iv) OTHERWISE COMPLYING WITH THE
PROVISIONS OF SECTION 7 OF THIS WARRANT.
INTEGRATED PACKAGING ASSEMBLY CORPORATION
WARRANT TO PURCHASE SHARES
OF COMMON STOCK
THIS CERTIFIES THAT, for value received, MMC/GATX Partnership No. I and its
assignees are entitled to subscribe for and purchase the initial number of
shares of the fully paid and nonassessable Common Stock (as adjusted pursuant
to Section 4 hereof, the 'Shares") of Integrated Packaging Assembly
Corporation, a Delaware corporation (the "Company"), at the initial exercise
price per share specified herein (such price and such other price as shall
result, from time to time, from the adjustments specified in Section 4 hereof
is herein referred to as the "Warrant Price"), subject to the provisions and
upon the terms and conditions hereinafter set forth. The Warrant Price shall
be equal to $0.1236. The initial number of Shares shall be equal to 1,000,000.
As used herein, (a) the term "Date of Grant" shall mean the Date of Grant
listed on the signature page hereof, and (b) the term "Other Warrants" shall
mean any warrant issued upon transfer or partial exercise of this Warrant. The
term "Warrant" as used herein shall be deemed to include Other Warrants unless
the context clearly requires otherwise. "Common Stock" means the Company's
Common Stock as defined in its Certificate of Incorporation.
1. Term. The purchase right represented by this Warrant is exercisable,
in whole or in part, at any time and from time to time from the Date of Grant
through and including the date which is seven (7) years after the Date of
Grant. Notwithstanding any other provision of this Warrant, this Warrant shall
expire and the terms hereof shall terminate unless exercised on or prior to
5:00 p.m. (California time) on May 1, 2006.
2. Method of Exercise: Payment: Issuance of New Warrant. Subject to
Section 1 hereof, the purchase right represented by this Warrant may be
exercised by the holder hereof, in whole or in part and from time to time, at
the election of the holder hereof, by (a) the surrender of this Warrant (with
the notice of exercise substantially in the form attached hereto as Exhibit A
duly completed and executed) at the principal office of the Company and by the
payment to the Company, by certified or bank check, or by wire transfer to an
account designated by the Company of an amount equal to the then applicable
Warrant Price multiplied by the number of Shares then being purchased, or (b)
exercise of the right provided for in Section 9.1 hereof. The person or
persons in whose name(s) any certificate(s) representing the Shares shall be
issuable upon exercise of this Warrant shall be deemed to have become the
holder(s) of record of, and shall be treated for all purposes as the record
holder(s) of, the shares represented thereby (and such shares shall be deemed
to have been issued) immediately prior to the close of business on the date or
dates upon which this Warrant is exercised. In the event of any exercise of
the rights represented by this Warrant, certificates for the shares of stock
so purchased shall be delivered to the holder hereof as soon as possible and
in any event within thirty (30) days after such exercise and, unless this
Warrant has been fully exercised or expired, a new Warrant representing the
portion of the Shares, if any, with respect to which this Warrant shall not
then have been exercised shall also be issued to the holder hereof as soon as
possible and in any event within such thirty-day period.
Page 1
3. Stock Fully Paid: Reservation of Shares. All Shares that may be
issued upon the exercise of the rights represented by this Warrant will, upon
issuance pursuant to the terms and conditions herein, be fully paid and
nonassessable, and free from all taxes, liens and charges with respect to the
issue thereof. During the period within which the rights represented by this
Warrant may be exercised, the Company will at all times have authorized, and
reserved for the purpose of the issue upon exercise of the purchase rights
evidenced by this Warrant, a sufficient number of shares of its Common Stock
to provide for the exercise of the rights represented by this Warrant.
4. Adiustment of Warrant Price and Number of Shares. The number and kind
of securities purchasable upon the exercise of this Warrant and the Warrant
Price shall be subject to adjustment from time to time upon the occurrence of
certain events, as follows:
(a) Reclassification or Merger. In case of any reclassification or
change of securities of the class issuable upon exercise of this Warrant
(other than a change in par value, or from par value to no par value, or from
no par value to par value, or as a result of a subdivision or combination), or
in case of any merger of the Company with or into another corporation (other
than a merger with another corporation in which the Company is the acquiring
and the surviving corporation and which does not result in any
reclassification or change of outstanding securities issuable upon exercise of
this Warrant), or in case of any sale of all or substantially all of the
assets of the Company, the Company, or such successor or purchasing
corporation, as the case may be, shall duly execute and deliver to the holder
of this Warrant a new Warrant (in form and substance reasonably satisfactory
to the holder of this Warrant), so that the holder of this Warrant shall have
the right to receive, at a total purchase price not to exceed that payable
upon the exercise of the unexercised portion of this Warrant, and in lieu of
the shares of Common Stock theretofore issuable upon exercise of this Warrant,
the kind and amount of shares of stock, other securities, money and property
receivable upon such reclassification, change or merger by a holder of the
number of shares of Common Stock then purchasable under this Warrant. Such new
Warrant shall provide for adjustments that shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section 4. The
provisions of this Section 4(a) shall similarly apply to successive
reclassifications, changes, mergers and transfers.
(b) Subdivision or Combination of Shares. If the Company at any
time while this Warrant remains outstanding and unexpired shall subdivide or
combine its outstanding shares of Common Stock, the Warrant Price shall be
proportionately decreased in the case of a subdivision or increased in the
case of a combination, effective at the close of business on the date the
subdivision or combination becomes effective.
(c) Stock Dividends and Other Distributions. If the Company at any
time while this Warrant is outstanding and unexpired shall (i) pay a dividend
with respect to Common Stock payable in Common Stock, or (ii) make any other
distribution of Common Stock with respect to Common Stock which does not
require the holder to pay any consideration prior to receiving such
distribution of Common Stock (except any distribution specifically provided
for in Sections 4(a) and 4(b)), then the Warrant Price shall be adjusted, from
and after the date such dividend or distribution becomes effective, to that
price determined by multiplying the Warrant Price in effect immediately prior
to such date of determination by a fraction (i) the numerator of which shall
be the total number of shares of Common Stock outstanding immediately prior to
such dividend or distribution, and (ii) the denominator of which shall be the
total number of shares of Common Stock outstanding immediately after such
dividend or distribution.
Page 2
(d) Adjustments for Diluting Issuances.
(i) Adjustment Procedure. Upon each Actual Issuance of Common
Stock or Deemed Issuance of Common Stock ("Issuance of Common Stock") after
May 1, 1999, for no consideration or for a consideration per share less than
the Warrant Price (a "Dilutive Issuance"), then, concurrent with the closing
of the Dilutive Issuance, the number of Shares issuable upon the exercise of
this Warrant shall be increased by the number of shares of Common Stock
determined under the following formula:
X= (B x A)-(B x C)
---------------
C
Where: X= The increase in the number of Shares acquirable
hereunder
B= The Shares acquirable hereunder immediately prior to
the Issuance of Common Stock
A= The Warrant Price in effect immediately prior to the
Issuance of Common Stock
C= The Adjusted Share Value
For purposes hereof, the Adjusted Share Value, upon the closing of any
Issuance of Common Stock, shall be the amount equal to the sum of (i) the
amount obtained by multiplying the Common Stock Outstanding immediately prior
to the Issuance of Common Stock by the Warrant Price in effect immediately
prior to the Issuance of Common Stock, and (ii) the Aggregate Consideration
that the Company receives from the Issuance of Common Stock, and dividing the
resulting sum by the Common Stock Outstanding immediately after the Issuance
of Common Stock. Upon each Issuance of Common Stock described in this
subsection (d), the Warrant Price shall be adjusted to the Adjusted Share
Value resulting from such Issuance of Common Stock.
(ii) Special Provisions. Notwithstanding the provisions of
subsection (i) of this Section 4(d), the following provisions shall govern the
adjustment formula set forth in subsection (i):
(A) Deemed Issuances of Common Stock. Whenever an
adjustment is made in the Warrant Price pursuant to subsection (i) based upon
a Deemed Issuance of Common Stock (as defined below), except as provided in
paragraph (C) of this subsection, no further adjustment in the Warrant Price
shall be made upon the subsequent actual issuance of the shares of Common
Stock subject to the applicable Convertible Securities or Options, nor shall
the exercise of any Convertible Security or Option included in such Deemed
Issuance of Common Stock constitute an issuance of securities for which an
adjustment in the Warrant Price may be made under this Section 4(d).
Page 3
(B) Change in Exercise Price or Conversion Rate. If,
subsequent to any Deemed Issuance of Common Stock, there is a change (other
than a change required by anti-dilution provisions of any Convertible Security
or Option intended to serve the same purpose as the provisions of this Section
4(d)) in (i) the purchase or exercise price provided for in any Option
included in such Deemed Issuance of Common Stock (an "Exercise I'rice") or
(ii) the conversion price or exchange ratio (a "Conversion Rate") of any
Convertible Security included in such Deemed Issuance of Common Stock, such
that the changed Exercise Price or Conversion Rate, as the case may be, had it
been in effect at the time of such Deemed Issuance of Common Stock, would have
resulted in a decrease in the Warrant Price as a result of such Deemed
Issuance of Common Stock, then (A) the Warrant Price shall be recalculated to
equal that Warrant Price which would have been in effect at such time had all
of such Options or Convertible Securities that remain outstanding at the time
of such change (or that may be issued upon the exercise of any Option or
Convertible Securities included in such Deemed Issuance of Common Stock and
that then remain outstanding) provided for such changed Exercise Price or
Conversion Rate, as the case may be, at the time of such Deemed Issuance of
Common Stock, and (B) each other adjustment, if any, made to the Warrant Price
subsequent to such Deemed Issuance of Common Stock based on subsequent
Issuances of Common Stock shall be recalculated, utilizing for such purpose
the Average Offering Price as recalculated or as readjusted pursuant to
subsection (i) of this Section 4(d).
(C) Expiration of Option or Convertible Right. With
respect to any Deemed Issuance of Common Stock, effective as of the close of
business on the first business day on which no share of Common Stock may
thereafter be issued upon an exercise of an Option or Convertible Security
included in such Deemed Issuance of Common Stock (whether by reason of (i) the
full exercise of all Options and/or Convertible Securities Included in such
Deemed Issuance of Common Stock or (ii) the expiration or termination of any
right to exercise any Options and/or Convertible Securities included in such
Deemed Issuance of Common Stock that have not theretofore been exercised
and/or (iii) the purchase by the Company and cancellation or retirement of
some or all Options and/or Convertible Securities included in such Deemed
Issuance of Common Stock that have not theretofore been exercised), the
Warrant Price shall be adjusted by (x) recalculating the Warrant Price
pursuant to Section 4(d) hereof, basing such recalculation on each issuance of
shares of Common Stock upon an exercise of an Option or Convertible Security
included in such Deemed Issuance of Common Stock, rather than the Common Stock
Outstanding on which the original calculation was based and (y) recalculating
each other adjustment, if any, made to Warrant Price subsequent to such Deemed
Issuance of Common Stock based on subsequent Issuances of Common Stock,
utilizing the Warrant Price as adjusted pursuant to subsection (i) of this
Section 4(d) and including in Common Stock Outstanding for such purpose only
the shares of Common Stock actually issued upon the exercise of Options and/or
Convertible Securities included in such Deemed Issuance of Common Stock in
place of the shares of Common Stock Outstanding in respect of such Deemed
Issuance of
Common Stock as utilized in the original calculations of those adjustments.
Page 4
(iii) Definitions.
Actual Issuance of Common Stock means any issuance by the Company of Common
Stock other than pursuant to conversion of a Convertible Security or exercise
of an Option.
Aggregate Consideration means with respect of an Issuance of Common Stock, an
amount equal to (i) the aggregate consideration that the Company receives with
respect to an issuance by the Company of Common Stock other than pursuant to
conversion of a Convertible Security or exercise of an Option ("Actual
Consideration"), if any, issued and (ii) the Deemed Consideration received
with respect to the Options and Convertible Securities, if any, issued.
Common Stock Outstanding means as of any date (i) all shares of Common Stock
that are outstanding as of such date, plus (ii) all shares of Common Stock
issuable upon conversion of Convertible Securities outstanding as of such
date, whether or not convertible as of such date, plus (iii) all shares of
Common Stock issuable upon exercise of Options outstanding as of such date,
whether or not such Options are exercisable as of such date (assuming for this
purpose that Convertible Securities acquirable upon exercise of any such
Options are converted into Common Stock as of such date).
Convertible Securities means evidence of indebtedness, shares of stock or
other securities which are convertible into or exchangeable for, with or
without payment of additional consideration, shares of Common Stock, either
immediately or upon the arrival of a specified date or the happening of a
specified event or both.
Deemed Consideration means the aggregate consideration received or deemed
received by the Company with respect to the Company's issuance of a
Convertible Security or Option (a "Deemed Issuance of Common Stock"),
determined by adding (i) the aggregate amount, if any, received or receivable
by the Company as consideration in respect of the issuance of Options and/or
Convertible Securities constituting such Deemed Issuance of Common Stock, and
(ii) the minimum aggregate amount of additional consideration, if any, payable
to the Company upon the full exercise of the Options (and if Options to
acquire Convertible Securities, upon full exercise of the conversion rights
with respect to such Convertible Securities) and upon full conversion of the
Convertible Securities in order to acquire the underlying shares of Common
Stock.
Deemed Issuance of Common Stock means an issuance by the Company of a
Convertible Security or an Option.
Option means any right, warrant or option to subscribe or purchase shares of
Common Stock or Convertible Securities.
(e) Adjustment of Number of Shares. Upon each adjustment in the
Warrant Price under subsections (a), (b) and (c) of this section, the number
of Shares purchasable hereunder shall be adjusted, to the nearest whole share,
to the product obtained by multiplying the number of Shares purchasable
immediately prior to such adjustment in the Warrant Price by a fraction, the
numerator of which shall be the Warrant Price immediately prior to such
adjustment and the denominator of which shall be the Warrant Price immediately
thereafter.
Page 5
5. Notice of Adjustments. Whenever the Warrant Price or the number of
Shares purchasable hereunder shall be adjusted pursuant to Section 4 hereof,
the Company shall make a certificate signed by its chief financial officer
setting forth, in reasonable detail, the event requiring the adjustment, the
amount of the adjustment, the method by which such adjustment was calculated,
and the Warrant Price and the number of Shares purchasable hereunder after
giving effect to such adjustment, and shall cause copies of such certificate
to be mailed (without regard to Section 13 hereof, by first class mail,
postage prepaid) to the holder of this Warrant at such holder's last known
address as reflected in the Company's records.
6. Fractional Shares. No fractional shares of Common Stock will be
issued in connection with any exercise hereunder, but in lieu of such
fractional shares the Company shall make a cash payment therefor based on the
fair market value of the Common Stock on the date of exercise as reasonably
determined in good faith by the Company's Board of Directors.
7. Compliance with Securities Act: Disposition of Warrant or Shares of
Common Stock.
(a) Compliance with Securities Act. The holder of this Warrant, by
acceptance hereof, agrees that this Warrant, and the Shares to be issued upon
exercise hereof are being acquired for investment and that such holder will
not offer, sell or otherwise dispose of this Warrant, or any Shares except
under circumstances which will not result in a violation of the Securities Act
of 1933, as amended (the "Act"), or any applicable state securities laws. Upon
exercise of this Warrant, unless the Shares being acquired are registered
under the Act and any applicable state securities laws or an exemption from
such registration is available, the holder hereof shall confirm in writing
that the Shares so purchased are being acquired for investment and not with a
view toward distribution or resale in violation of the Act and shall confirm
such other matters related thereto as may be reasonably requested by the
Company. This Warrant and all Shares issued upon exercise of this Warrant
(unless registered under the Act and any applicable state securities laws)
shall be stamped or imprinted with a legend in substantially the following
form:
"THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. NO SALE OR
DISPOSITION MAY BE EFFECTED WITHOUT (i) EFFECTIVE REGISTRATION STATEMENTS
RELATED THERETO, (ii) AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY
SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATIONS ARE NOT REQUIRED, (iii)
RECEIPT OF NO-ACTION LETTERS FROM THE APPROPRIATE GOVERNMENTAL AUTHORITIES, OR
(iv) OTHERWISE COMPLYING WITH THE PROVISIONS OF SECTION 7 OF THE WARRANT UNDER
WHICH THESE SECURITIES WERE ISSUED, DIRECTLY OR INDIRECTLY."
Said legend shall be removed by the Company, upon the request of a holder, at
such time as the restrictions on the transfer of the applicable security shall
have terminated. In addition, in connection with the issuance of this Warrant,
the holder specifically represents to the Company by acceptance of this
Warrant as follows:
Page 6
(1) The holder is aware of the Company's business affairs and
financial condition, and has acquired information about the Company sufficient
to reach an informed and knowledgeable decision to acquire this Warrant. The
holder is acquiring this Warrant for its own account for investment purposes
only and not with a view to, or for the resale in connection with, any
"distribution" thereof in violation of the Act.
(2) The holder understands that this Warrant has not been
registered under the Act or any state securities laws in reliance upon
specific exemptions therefrom, which exemptions depend upon, among other
things, the bona fide nature of the holder's investment intent as expressed
herein.
(3) The holder further understands that this Warrant and the
securities issuable upon the exercise hereof must be held indefinitely unless
subsequently registered under the Act and qualified under any applicable state
securities laws, or unless exemptions from registration and qualification are
otherwise available. The holder is aware of the provisions of Rule 144,
promulgated under the Act.
(b) Disposition of Warrant or Shares. With respect to any offer,
sale or other disposition of this Warrant or any Shares acquired pursuant to
the exercise of this Warrant prior to registration of such Warrant or Shares
under the Act, the holder hereof agrees to give written notice to the Company
prior thereto, describing in reasonable detail the manner thereof, together
with a written opinion of such holder's counsel, or other evidence, if
reasonably requested by the Company, to the effect that such offer, sale or
other disposition may be effected without registration or qualification (under
the Act as then in effect or any federal or state securities law then in
effect) of this Warrant or the Shares and indicating whether or not under the
Act certificates for this Warrant or the Shares to be sold or otherwise
disposed of require any restrictive legend as to applicable restrictions on
transferability in order to ensure compliance with such laws. Promptly upon
receiving such written notice and reasonably satisfactory opinion or other
evidence, if so requested, the Company, as promptly as practicable but no
later than fifteen (15) days after receipt of the written notice, shall notify
such holder that such holder may sell or otherwise dispose of this Warrant or
such Shares, all in accordance with the terms of the notice delivered to the
Company and applicable laws. If a determination has been made pursuant to this
Section 7(b) that the opinion of counsel for the holder or other evidence is
not reasonably satisfactory to the Company, the Company shall so notify the
holder promptly with details thereof after such determination has been made.
Notwithstanding the foregoing, this Warrant or such Shares may, as to such
federal laws, be offered, sold or otherwise disposed of in accordance with
Rule 144 or 144A under the Act, provided that the Company shall have been
furnished with such information as the Company may reasonably request to
provide a reasonable assurance that the provisions of Rule 144 or 144A have
been satisfied. Each certificate representing this Warrant or the Shares thus
transferred (except a transfer pursuant to Rule 144 or 144A) shall bear a
legend as to the applicable restrictions on transferability in order to ensure
compliance with such laws, unless in the aforesaid opinion of counsel for the
holder, such legend is not required in order to ensure compliance with such
laws. The Company may issue stop transfer instructions to its transfer agent
in connection with such restrictions.
Page 7
(c) Applicability of Restrictions. Neither any restrictions of
any legend described in this Warrant nor the requirements of Section 7(b)
above shall apply to any transfer or grant of a security interest in, this
Warrant (or the Common Stock obtainable upon exercise thereof) or any part
hereof (i) to a partner of the holder if the holder is a partnership, (ii) to
a partnership of which the holder is a partner, or (iii) to any affiliate of
the holder if the holder is a corporation; provided, however, in any such
transfer, if applicable, the transferee shall on the Company's request agree
in writing to be bound by the terms of this Warrant as if an original
signatory hereto.
8. Rights as Stockholders: Information. No holder of this Warrant, as
such, shall be entitled to vote or receive dividends or be deemed the holder
of Shares, nor shall anything contained herein be construed to confer upon the
holder of this Warrant, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until
this Warrant shall have been exercised and the Shares purchasable upon the
exercise hereof shall have become deliverable, as provided herein.
Notwithstanding the foregoing, the Company will transmit to the holder of this
Warrant such information, documents and reports as are generally distributed
to the holders of any class or series of the securities of the Company
concurrently with the distribution thereof to the stockholders.
9. Additional Rights.
9.1 Right to Convert Warrant into Stock: Net Issuance.
(a) Right to Convert. In lieu of payment of the exercise price
as provided in Section 2 hereof, the holder shall have the right to convert
this Warrant or any portion thereof (the "Conversion Right") into shares of
Common Stock as provided in this Section 9.1 at any time or from time to time
prior to the expiration of this Warrant. Upon exercise of the Conversion Right
with respect to a particular number of shares subject to this Warrant (the
"Converted Warrant Shares"), the Company shall deliver to the holder (without
payment by the holder of any exercise price or any cash or other
consideration) (X) that number of shares of fully paid and nonassessable
Common Stock equal to the quotient obtained by dividing the value of this
Warrant (or the specified portion hereof) on the Conversion Date (as defined
in subsection (b) hereof), which value shall be determined by subtracting (A)
the aggregate Warrant Price of the Converted Warrant Shares immediately prior
to the exercise of the Conversion Right from (B) the aggregate fair market
value of the Converted Warrant Shares issuable upon exercise of this Warrant
(or the specified portion hereof) on the Conversion Date (as herein defined)
by (Y) the fair market value of one share of Common Stock on the Conversion
Date (as herein defined).
Expressed as a formula, such conversion shall be computed as follows:
X= B-A
---
Y
Page 8
Where: X= the number of shares of Common Stock that may be issued to
holder
Y= the fair market value (FMV) of one share of Common Stock
A= the aggregate Warrant Price (i.e., Converted Warrant Shares
x Warrant Price)
B= the aggregate FMV (i.e., FMV x Converted Warrant Shares)
No fractional shares shall be issuable upon exercise of the Conversion Right,
and, if the number of shares to be issued determined in accordance with the
foregoing formula is other than a whole number, the Company shall pay to the
holder an amount in cash equal to the fair market value of the resulting
fractional share on the Conversion Date (as hereinafter defined). For purposes
of this Section 9, shares issued pursuant to the Conversion Right shall be
treated as if they were issued upon the exercise of this Warrant.
(b) Method of Exercise. The Conversion Right may be exercised by
the holder by the surrender of this Warrant at the principal office of the
Company together with a written statement specifying that the holder thereby
intends to exercise the Conversion Right and indicating the number of shares
subject to this Warrant which are being surrendered (referred to in Section
9.1(a) hereof as the Converted Warrant Shares) in exercise of the Conversion
Right. Such conversion shall be effective upon receipt by the Company of this
Warrant together with the aforesaid written statement, or on such later date
as is specified therein, which date shall in no event be later than the
expiration date of this Warrant (the "Conversion Date"). Certificates for the
shares issuable upon exercise of the Conversion Right and, if applicable, a
new warrant evidencing the balance of the shares remaining subject to this
Warrant, shall be issued as of the Conversion Date and shall be delivered to
the holder within thirty (30) days following the Conversion Date.
(c) Determination of Fair Market Value. For purposes of this
Section 9.1, "fair market value" of a share of Common Stock as of a particular
date (the "Determination Date") shall mean:
(i) If traded on a securities exchange or the Nasdaq National
Market, the fair market value of the Common Stock shall be deemed to be the
average of the closing prices of the Common Stock on such exchange or market
over the 30-day period ending on the day prior to the Determination Date;
(ii) If traded over-the-counter, the fair market value of the
Common Stock shall be deemed to be the average of the closing bid prices of
the Common Stock over the 30-day period ending on the day prior to the
Determination Date; and
(iii) If there is no public market for the Common Stock, then
fair market value shall be determined by mutual agreement of the holder of
this Warrant and the Company.
Page 9
10. Representations and Warranties. The Company represents and warrants
to the holder of this warrant as follows:
(a) This Warrant has been duly authorized and executed by the
Company and is a valid and binding obligation of the Company enforceable in
accordance with its terms, subject to laws of general application relating to
bankruptcy, insolvency and the relief of debtors and the rules of law or
principles at equity governing specific performance, injunctive relief and
other equitable remedies;
(b) The Shares have been duly authorized and reserved for issuance
by the Company and, when issued in accordance with the terms hereof will be
validly issued, fully paid and non-assessable;
(c) The rights, preferences, privileges and restrictions granted to
or imposed upon the Shares and the holders thereof are as set forth in the
Company's Certificate of Incorporation, as amended to the Date of the Grant, a
true and complete copy of which has been delivered to the original holder of
this Warrant (the "Charter");
(d) The execution and delivery of this Warrant are not, and the
issuance of the Shares upon exercise of this Warrant in accordance with the
terms hereof will not be, inconsistent with the Company's Charter or bylaws,
do not and will not contravene any law, governmental rule or regulation,
judgment or order applicable to the Company, and do not and will not conflict
with or contravene any provision of, or constitute a default under, any
indenture, mortgage, contract or other instrument of which the Company is a
party or by which it is bound or require the consent or approval of, the
giving of notice to, the registration or filing with or the taking of any
action in respect of or by, any Federal, state or local government authority
or agency or other person, except for the filing of notices pursuant to
federal and state securities laws, which filings will be effected by the time
required thereby; and
(e) There are no actions, suits, audits, investigations or
proceedings pending or, to the knowledge of the Company, threatened against
the Company in any court or before any governmental commission, board or
authority which, if adversely determined, will have a material adverse effect
on the ability of the Company to perform its obligations under this Warrant.
11. Modification and Waiver. This Warrant and any provision hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
12. Notices. Any notice, request, communication or other document
required or permitted to be given or delivered to the holder hereof or the
Company shall be delivered, or shall be sent by certified or registered mail,
postage prepaid, to each such holder at its address as shown on the books of
the Company or to the Company at the address indicated therefore on the
signature page of this Warrant.
Page 10
13. Binding Effect on Successors. This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets, and all of the obligations
of the Company relating to the Shares issuable upon the exercise or conversion
of this Warrant shall survive the exercise, conversion and termination of this
Warrant and all of the covenants and agreements of the Company shall inure to
the benefit of the successors and assigns of the holder hereof. The Company
will, at the time of the exercise or conversion of this Warrant, in whole or
in part, upon request of the holder hereof but at the Company's expense,
acknowledge in writing its continuing obligation to the holder hereof in
respect of any rights to which the holder hereof shall continue to be entitled
after such exercise or conversion in accordance with this Warrant; provided,
that the failure of the holder hereof to make any such request shall not
affect the continuing obligation of the Company to the holder hereof in
respect of such rights.
14. Lost Warrants or Stock Certificates. The Company covenants to the
holder hereof that, upon receipt of evidence reasonably satisfactory to the
Company and its transfer agent of the loss, theft, destruction or mutilation
of this Warrant or any stock certificate and, in the case of any such loss,
theft or destruction, upon receipt of an indemnity reasonably satisfactory to
the Company, or in the case of any such mutilation upon surrender and
cancellation of such Warrant or stock certificate, the Company will make and
deliver a new Warrant or stock certificate, of like tenor, in lieu of the
lost, stolen, destroyed or mutilated Warrant or stock certificate.
15. Descriptive Headings. The descriptive headings of the several
paragraphs of this Warrant are inserted for convenience only and do not
constitute a part of this Warrant. The language in this Warrant shall be
construed as to its fair meaning without regard to which party drafted this
Warrant.
16. Governing Law. This Warrant shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws
of the State of California.
17. Survival of Representations. Warranties and Agreements. All
representations and warranties of the Company and the holder hereof contained
herein shall survive the Date of Grant, the exercise or conversion of this
Warrant (or any part hereof) or the termination or expiration of rights
hereunder. All agreements of the Company and the holder hereof contained
herein shall survive indefinitely until, by their respective terms, they are
no longer operative.
18. Remedies. In case any one or more of the covenants and agreements
contained in this Warrant shall have been breached, the holders hereof (in the
case of a breach by the Company), or the Company (in the case of a breach by a
holder), may proceed to protect and enforce their or its rights either by suit
in equity and/or by action at law, including, but not limited to, an action
for damages as a result of any such breach and/or an action for specific
performance of any such covenant or agreement contained in this Warrant.
19. [INTENTIONALLY OMITTED.]
Page 11
20. Severabilitv. The invalidity or unenforceability of any provision of
this Warrant in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction, or affect any
other provision of this Warrant, which shall remain in full force and effect.
21. Recovery of Litigation Costs. If any legal action or other proceeding
is brought for the enforcement of this Warrant, or because of an alleged
dispute, breach, default, or misrepresentation in connection with any of the
provisions of this Warrant, the successful or prevailing party or parties
shall be entitled to recover reasonable attorneys' fees and other costs
incurred in that action or proceeding, in addition to any other relief to
which it or they may be entitled.
22. Entire Agreement: Modification. This Warrant constitutes the entire
agreement between the parties pertaining to the subject matter contained in it
and supersedes all prior and contemporaneous agreements, representations, and
undertakings of the parties, whether oral or written, with res ct to such
subject matter.
INTEGRATED PACKAGING ASSEMBLY CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Chief Financial Officer
Address: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Date of Grant: May 1, 1999
Page 12
EXHIBIT A
NOTICE OF EXERCISE
To: INTEGRATED PACKAGING ASSEMBLY CORPORATION (the "Company")
1. The undersigned hereby:
_____________ elects to purchase ____ shares of Common Stock of the
Company pursuant to the terms of the attached Warrant, and tenders herewith
payment of the purchase price of such shares in full, or
_____________ elects to exercise its net issuance rights pursuant to
Section 9.1 of the attached Warrant with respect to ____ shares of Common
Stock.
2. Please issue a certificate or certificates representing said shares
in the name of the undersigned or in such other name or names as are specified
below.
_________________________
(Name)
_________________________
_________________________
(Address)
3. The undersigned represents that the aforesaid shares are being
acquired for the account of the undersigned for investment and not with a
view to, or for resale in connection with, the distribution thereof and that
the undersigned has no present intention of distributing or reselling such
shares, all except as in compliance with applicable securities laws.
________________________________
(Signature)
______________
(Date)
